Let’s pretend it’s the recession - attack my portfolio
I hope everyone loves a good hypothetical worst case scenario like I do!
I was listening to the BP money podcast today and heard another recession story from ‘08. It always makes me wonder - how can my portfolio be affected by the next recession. I think it’s safe - but I’m sure everyone else in 08 did too!
Below is a rough summary of what I got - would love to hear any crazy or not so crazy idea on how bad or good I might have it when the next one hits.
Between the years of 2016-2020 I’ve purchased 6 single family condos in Knoxville, TN. Each one was done with 20% down and 30 year fixed rate.
I currently net $350-$450 per unit each month after all the costs are done. Nothing crazy but it’s been nice cash flow streaming in.
OK...whattayah got?!?
@Joe Delgrosso I survived the last one and bought more during it, but my #1 concern were job losses by tenants. No rental income, harder to pay mortgages.
Other things like property depreciation are less of a concern b/c it's all paper losses unless you sell it. If you're a buy & hold forever type, then you don't have much concern.
Since you're dealing with condos, I suppose you have to worry about the financial health of the HOAs. More defaults equal higher payments and greater difficulty getting a refi/HELOC if you need one.
@Matt Castle
That’s a great point about the HOAs, never thought of that. I wonder how common it is.
But yeah, I’m a buy and hold investor. Not selling these properties anytime soon!
I speak from personal experience on the HOA issue. I had a condo where HOA finances went south. Payments went from $150/mo to $240/mo plus a $100/month add on water fee b/c of a water main break and lots of damage. Complex went from looking okay to run down, great looking condo inside but outside was poor visual appeal some tenants wouldn't even go in the condo after a drive by.
Oh wow. Stories like that make me happy that each of the condos are with different HOAs because I could imagine getting hurt bad if they were all under the same one.
How do I go about making sure the HOA is solid before buying?